The General Assembly came into special session Monday to tackle a measure that would have given as much as $40 million in aid to Goodyear Tire & Rubber. Members left Tuesday after approving a bill, which the governor made law, that could provide a total of $60 million to help Goodyear upgrade a Fayetteville plant and assist rival Bridgestone Firestone do the same in Wilson.

The legislature's action expands the scope of incentives policy in North Carolina by providing government aid not to attract new jobs but to maintain existing ones, and pays out even if the companies cut worker rolls.

Bill backers said they had to act to ensure that two of the largest employers in two poor counties stay put -- a premise that critics say is flawed. Bridgestone Firestone, for instance, has already spent $60 million upgrading its plant, and last year promised to stay in the county another decade after receiving local incentives.

Legislators worried that without assistance, Goodyear, which employs 2,750 in Fayetteville, would shift work to other worldwide locations. And if they snubbed Bridgestone Firestone, they feared that it, too, would leave.

"They are now -- right now -- making their modernization decisions," said Rep. Rick Glazier, a Fayetteville Democrat who helped write the legislation. The focus of the General Assembly was "not to solve all the problems of economic development everywhere. But it is to focus on two companies that are economically crucial to their regions."

Not only do the companies employ thousands, they pay above-average wages in the counties where they operate. Goodyear and Bridgestone Firestone, which employs 2,200 full-time and contract workers, pay an average of about $55,000 annually. Benefits can tack an additional $30,000 to compensation.

Mark A. Emkes, Bridgestone Americas CEO, said in a statement that the new law "is in the best interest" of the Wilson employees. Goodyear will evaluate the plan "determine how it may support" the company's future investment, spokesman Ed Markey said.

Manufacturing in N.C.

The entire legislative effort underscores the role that manufacturing continues to play in North Carolina. The sector remains the single largest component of the state's economy.

Indeed, manufacturing output has grown by about 18 percent during the past 10 years, based on inflation adjusted numbers, even as production employment has dropped by 251,000.

The figures show that factories, many with new machines, are producing more -- or at least more expensive -- goods.

And they illustrate one reality of modernization: more production with fewer people.

To qualify for assistance, Goodyear and Bridgestone Firestone must invest $200 million in their facilities within a six-year period. They can get aid, even if they cut as much as 20 percent of their work force. Their grants, though, will be reduced if they do.

The General Assembly acted Tuesday after Gov. Mike Easley on Aug. 30 vetoed legislators' first attempt to help Goodyear. He said that measure was unfair because it did not give the same benefits to Bridgestone Firestone, and he wanted wages and other criteria to protect workers.

The veto set up a showdown with the legislature, which appeared poised to override Easley and implement the original bill. Instead, legislative leaders spent Monday negotiating a compromise with Easley's staff. It passed the House 61-44 Tuesday afternoon and the Senate 25-16.

"This legislation will create cutting edge economic competitiveness in North Carolina, unlike any state in America," Easley said in a statement. "It requires huge investments ... by companies that accept the challenge to build world-class facilities here that are the most technologically advanced on the globe."

A flexible policy

Unlike the bill that Easley vetoed, the payments that companies receive are based on a formula, albeit a squishy one. Grants will refund 95 percent of sales tax on machinery, building materials and energy plus a portion of the income taxes that the companies pay. Payments will cover all worker training costs and state permitting fees.

The calculation, however, "is not necessarily limited to these factors," the law states.

The law marks the biggest effort, by far, to keep jobs in the state. The governor has used the One North Carolina fund to retain positions, but not on the same scale. In October 2004, Easley awarded $1 million to Philip Morris to help it retain a facility in Cabarrus County.

Some legislators were upset by the speed at which the compromise moved through the General Assembly. Legislators should have taken more time to consider what they were doing before creating drastically new criteria for business incentives, said Rep. Paul Luebke, a Durham Democrat and incentives critic.

"We're taking a major step backward today," he said.

He unsuccessfully pushed an amendment that would have required Goodyear and Bridgestone Firestone to repay grants if they laid off more than 20 percent of their workers, in line with other incentives. Philip Morris had to repay $750,000 of its grant because earlier this year it announced plans to close that plant.

Another point of concern: the timing of the required investment. The law says the companies must invest $200 million within six years, but it doesn't say when that period begins. It was left fuzzy so Bridgestone Firestone could get credit for investments already made.

Early last year, Bridgestone Firestone said it would invest $250 million over 10 years to upgrade the Wilson plant. Action came after Wilson County commissioners promised more than $800,000 in incentives and the N.C. Commerce Department awarded training grants.

Bridgestone Firestone spent $30 million in 2005 and 2006 on equipment, spokesman Dan MacDonald said. The company expects to continue spending a similar amount annually, although budgets are subject to change, he said.

"It is my belief, if you are going to have incentives, why not deal with somebody who has a proven track record, who has invested heavily in the community," said Sen. A.B. Swindell, a Wilson Democrat. "If we're going to do this, that's a pretty good place to do it."

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